An increase in the Living Wage and lack of support for energy efficiency schemes in the Chancellor’s July Budget are cause for concern for the construction industry, two senior industry figures have warned.

John Sinfield, managing director of manufacturer Knauf Insulation, revealed his disappointment that more resources had not been committed to ensuring the nation’s long-term energy efficient future by supporting the renewables industry.

The managing director of the Builders Merchants Federation (BMF), John Newcomb, suggested proposed increases for low-wage employees could trouble company finances in the immediate future, but praised support for large firms’ apprentice training that came in the form of an apprenticeship levy.

Mr Sinfield said: “Today the Chancellor identified confidence as central to the future of business growth. He is right, and this confidence should be easiest to achieve where Government already plays a role.

“Further policy instability will also cause business investment to continue to go abroad, making existing commitments to tackle fuel poverty by 2030 incrementally harder to achieve.

“A housing stock that is fit for modern usage reduces costs to the NHS. This has been acknowledged by the National Institute for Health and Care Excellence.

“It shows that upgrading our homes – the infrastructure in which we live – is part of making public spending more efficient, and improving the causes of ill health rather than treating the symptoms alone.

“But achieving any of these benefits requires an industry able to invest in the skills needed to finish the job. And this means a clear government programme to support their own aims,” Sinfield said.

Meanwhile, Mr Newcomb praised the government’s new apprenticeship levy that will see large firms receive back more money than they invest in training.

However, he warned that the Chancellor’s proposed wage increases will squeeze company finances in the short term.

He said: “Apprenticeships are the lifeblood of our economy. We have been urging the Chancellor to ensure the future funding provision for apprenticeships is sufficiently attractive to encourage employers to invest in developing new talent and training.

“The apprenticeship levy is a welcome and much needed boost to this. It means there is a real incentive to take on apprentices.

“The setting of the level of the Annual Investment Allowance to £200,000 by January and raising the Employment Allowance by £1,000 to £3,000 by April next year will help our SME members in particular.

“The freezing of fuel is also good news, but will be offset by the higher wage bills due to the rise in the Living Wage. Members will be squeezed by this in the short term especially as the fall in corporation tax to 18% will not take full effect until 2020.”